An effective leadership assessment measures two distinct axes: the team's alignment on the *importance* of a strategic goal and their agreement on how well it's being *executed*. This dual focus pinpoints misalignment on priorities, not just execution gaps.
Private equity firms can use the 5x CEO leadership assessment not just for annual reviews, but as a proactive tool to identify potential performance issues in portfolio companies early on, acting as a "pulse check" or an early detection system.
Instead of a long list of values, high-performing CEOs create an energized culture by defining and rigorously enforcing a minimal set of core values, such as "be competent and be kind." This simplicity makes them easy to remember, measure, and act upon decisively.
To move beyond platitudes about collaboration, one 5x CEO had his executive team stack-rank one another on their effectiveness as team players. This process created a measurable, accountable system that surfaced hidden friction and spotlighted true team-first leaders.
Truly effective strategic clarity involves translating the complex PE investment thesis into a simple "strategy on a page." The best CEOs communicate this relentlessly until every employee, regardless of role, understands the company's vision and their specific contribution to it.
One company adapted the traditional nine-box talent assessment—which typically measures performance vs. potential—by replacing the 'potential' axis with 'culture fit.' This modification ensures that evaluations heavily weigh an individual's contribution to the company's culture alongside their performance results.
Instead of focusing on traditional sales metrics, one company found its most powerful leading indicator for organic growth was the volume and quality of conversations between its own engineers and its customers' engineers. This metric became the central focus for driving the business forward.
CEOs can maintain focus by co-creating a simple one-page strategy with their board. When board members later propose off-strategy ideas, this document becomes a powerful tool to re-center the conversation and ask whether the new idea is important enough to displace an agreed-upon priority.